Nationwide home price growth is in line for a massive deceleration over the next 12 months as the effect of pandemic-driven changes in housing patterns diminishes, CoreLogic reported.
Remote work led people to look for homes further away from their office, often in the suburbs or exurbs.
Values are likely to increase by a scant 0.1% between September and October and by 1.9% through September 2022, CoreLogic's latest Home Price Index report said. This comes after annual growth of 18% and a 1.1%
"The pandemic led prospective buyers to seek detached homes in communities with lower population density, such as suburbs and exurbs," Frank Martell, president and CEO of CoreLogic, said in a press release. "As we head into 2022, we expect some moderation in the current pattern of flight away from urban cores as the pandemic wanes."
In 10 major markets as determined by CoreLogic, two — Houston and Phoenix — are expected to record price declines over the next 12 months. Homes in both of these markets are currently considered to be overvalued.
Prices in Phoenix are expected to fall by 0.6% by September 2022. They’d risen 31% in the past 12 months, the largest percentage increase among those 10 markets. CoreLogic forecasts a 1.6% decline in Houston in the next 12 months after increasing 14.9% through this September. Houston
On the other hand, price growth in San Diego — where CoreLogic says values in the market are normal — is expected to reach 6.5% through next September, which makes that a relatively hot market going forward. House prices in the Miami market, which CoreLogic considers to be overvalued, will rise by 4%.
Springfield, Massachusetts and Merced, California are the two cities with a very high probability (over 70%) of a price decline through September 2022, according to CoreLogic's Market Risk Indicator. The other metro areas cited as having a high likelihood (between 50% and 75%) of a price decline are Reading, Pennsylvania; Worcester, Massachusetts; and Norwich-New London, Connecticut.
